Concerns have emerged over cash availability at ATMs in smaller cities and towns, with the Reserve Bank of India (RBI) saying it will ensure sufficient currency for filling and refilling ATMs and bank branches across the country.
The issue came into focus after the Confederation of ATM Industry (CATMi), which represents ATM operators and service providers, raised concerns with the RBI over difficulties in obtaining cash for ATM replenishment. According to a report by Economic Times, CATMi has also sought compensation of ₹100 crore from the banking industry, claiming losses arising from ATM downtime.
What CATMi Has Said
The industry body has said that a disproportionate amount of cash is being routed to ATMs in Tier-1 cities, particularly within the network of State Bank of India (SBI), the country's largest lender, the report added. According to CATMi, this has led to cash shortages at some ATMs in Tier-2 and Tier-3 locations.
1 June 2026
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ATM operators raised the matter during a June 5 meeting with RBI and SBI officials, as per the ET report. SBI operates around 65,000 ATMs across the country — the largest network in India — and directly manages cash replenishment for nearly half of its ATM network, much of which is located in metro cities.
"The issue is specific to SBI. There is a real currency shortage — while smaller banks are managing, SBI has been caught in the wrong corner. Most cash is being channelled to Tier-1 locations, leaving the rest of the network under-supplied," the CEO of an ATM company told ET.
Industry representatives have claimed that cash availability for ATM loading has been declining over several months. In a letter to the Indian Banks Association (IBA), CATMi reportedly stated that ATM operators received only 57% of their cash requirement in April 2026, compared with 80% in November 2025. The body has warned that continued cash shortages could affect the viability of some ATM operations, particularly in smaller towns where transaction volumes are already under pressure.
Notably, RBI Governor Sanjay Malhotra indicated that the central bank has adequate currency supplies and will act if shortages arise. Speaking after the latest monetary policy announcement on June 5, Malhotra said the RBI prepares annual currency requirement estimates and provides cash to banks accordingly.
"We will ensure if there is a shortage, we have sufficient currency to go and fill and refill the ATMs and bank branches," he had said.
The concerns have emerged despite currency in circulation remaining at elevated levels. RBI data shows currency in circulation stood at more than ₹42.56 lakh crore as of May 29, 2026, up around 12% from a year earlier.
Pressure on ATM Operators
ATM usage has been declining as digital payments gain popularity. CATMi said monthly ATM cash withdrawals fell from about 57 crore transactions in January 2023 to around 44 crore by September 2025. Rising operating costs, including higher fuel and wage expenses, have added further pressure on ATM operators.
According to CATMi, most ATM operators are already working on thin margins, and prolonged cash shortages could make operations in certain locations financially challenging. The industry body has urged banks to work together to restore reliable cash availability for ATM replenishment, particularly in smaller cities and towns.
For now, there is no indication of a nationwide ATM shutdown. The RBI has assured that sufficient currency is available and that shortages, if any, will be addressed.
